12. Explain the concept of automatic review.

Taxes being the lifeblood of the Government, Section 12, which the Commissioner of
Customs in his Customs Memorandum Order No. 20-87, enjoined all collectors to
follow strictly, intended to protect the interest of the government in the collection of
taxes and customs duties in those seizure and protest cases which, without the
automatic review provided therein, neither the Commissioner of Customs nor the
Secretary of Finance would probably ever know about. Without the automatic review
by the Commissioner of Customs and the Secretary of Finance, a collector in any of
our countrys far-flung ports, would have absolute and unbridled discretion to
determine whether goods seized by him are locally produced, hence not dutiable, or
of foreign origin, and therefore subject to payment of customs duties and taxes. His
decisions, unless appealed by the aggrieved party (the owner of the goods), would
become final with no one the wiser except himself and the owner of the goods. The
owner of the goods cannot be expected to appeal the collectors decision when it is
favorable to him. A decision that is favorable to the taxpayer would correspondingly
be unfavorable to the government, but who will appeal the collectors decision in
that? Certainly, it is not the collector (Yaokasin vs. Commissioner of Customs).
13. May a violation of the Customs Law be compromised?
No.
Rovero v. Amparo,[32] which petitioners cited, did not set any precedent that all
compromise agreements after final judgment were invalid. In that case, the customs
commissioner imposed a fine on an importer, based on the appraised value of the
goods illegally brought to the country. The latters appeal, which eventually reached
this Court, was denied. Despite a final judgment, the customs commissioner still
reappraised the value of the goods and effectively reduced the amount of fine.
Holding that he had no authority to compromise a final judgment, the Court
explained:
It is argued that the parties to a case may enter into a compromise about even a
final judgment rendered by a court, and it is contended x x x that the reappraisal
ordered by the Commissioner of Customs and sanctioned by the Department of
Finance was authorized by Section 1369 of the [Revised Administrative Code]. The
contention may be correct as regards private parties who are the owners
of the property subject-matter of the litigation, and who are therefore free
to do with what they own or what is awarded to them, as they please,
even to the extent of renouncing the award, or condoning the obligation
imposed by the judgment on the adverse party. Not so, however, in the
present case. Here, the Commissioner of Customs is not a private party and is not
the owner of the money involved in the fine based on the original appraisal. He is a
mere agent of the Government and acts as a trustee of the money or property in his
hands or coming thereto by virtue of a favorable judgment. Unless expressly

authorized by his principal or by law, he is not authorized to accept anything

different from or anything less than what is adjudicated in favor of the Government.
[33]
(Bold types supplied) (Magbanua, et. al. vs. Uy)
14. When may any vehicle, vessel or aircraft, cargo, articles be subjected
to forfeiture?
Section 2530. Property Subject to Forfeiture Under Tariff and Customs Laws. Any
vessel or aircraft, cargo, articles and other objects shall, under the following
conditions, be subject to forfeiture:
a. Any vessel or aircraft, including cargo, which shall be used lawfully in the
importation or exportation of articles into or from any Philippine port or place
except a port of entry; and any vessel which, being of less than thirty tons
capacity shall be used in the importation of articles into any Philippine port or
place except into a port of the Sulu sea where importation in such vessel may
be authorized by the Commissioner, with the approval of the department
head.
b. Any vessel engaging in the coastwise trade which shall have on board any
article of foreign growth, product or manufacture in excess of the amount
necessary for sea stores, without such article having been properly entered
or legally imported.
c. Any vessel or aircraft into which shall be transferred cargo unladen
contrary to law prior to the arrival of the importing vessel or aircraft at her
port of destination.
d. Any part of the cargo of a vessel or aircraft arriving from a foreign port
which is unladen before arrival at the vessel's or aircraft's port of destination
and without authority from the proper customs official; but such cargo shall
not be forfeited if such unlading was due to accident, stress of weather or
other necessity and is subsequently approved by the Collector.
e. Any article which is fraudulently concealed in or removed from any public
or private warehouse under customs supervision.
f. Any article of prohibited importation or exportation, the importation or
exportation of which is effected or attempted contrary to law, and all other
articles which, in the opinion of the Collector, have been used, are or were
intended to be used as instrument in the importation or exportation of the
former.

g. Unmanifested article found on any vessel or aircraft, if manifest therefor is

required.
h. Sea stores or stores for aircraft adjudged by the Collector to be excessive,
when the duties assessed by the Collector thereon are not paid or secured
forthwith upon assessment of the same.
i. Any package of imported article which is found by the examining official to
contain any article not specified in the invoice or entry, including all other
packages purportedly containing imported articles similar to those declared
in the invoice or entry to be the contents of the misdeclared package,
provided the Collector is of the opinion that the misdeclaration was caused
with fraudulent intent.
j. Boxes, cases, trunks, envelopes and other containers of whatever character
used as receptacles or as devices to conceal article which is itself subject to
forfeiture under the customs and tariff laws or which is so designed as to
conceal the character of such article.
k. Any beast actually being used for the conveyance of article subject to
forfeiture under the customs and tariff laws with its equipage or trappings,
and any vehicles similarly used, together with its equipage and
appurtenances, including the beast, team or other motive power drawing or
propelling the same; but the forfeiture shall not be effected if it is established
that the owner of the means of conveyance used as aforesaid or his agent in
charge thereof at the time, has no knowledge of the unlawful act.
l. Any money or thing of value offered as a bribe or for the purpose of
exerting improper influence over a customs official or employee.
m. Any article sought to be imported or exported:
(1) Without going through a customhouse, whether the act was
consummated, frustrated or attempted;
(2) By failure to mention to a customs official, articles found in the
baggage of a person arriving from abroad.
(3) On the strength of a false declaration or affidavit executed by the
owner, importer, exporter or consignee concerning the importation or
exportation of such article.

(4) On the strength of a false invoice or other document executed by

the owner, importer, exporter or consignee concerning the importation
or exportation of such article.
(5) Through any other fraudulent practice or device by means of which
such articles was entered through a customhouse to the prejudice of
the government.
15. Is the lack of knowledge of the owner of the seized property a valid
defense?
No.
SEC. 2530. Property Subject to Forfeiture Under Tariff and Customs
Law.- Any vehicle, vessel or aircraft, cargo, article and other objects
shall under the following conditions be subject to forfeiture
a. Any vehicle, vessel or aircraft, including cargo, which
shall be used unlawfully in the importation or exportation
of articles or in conveying and or transporting contraband,
or smuggled article in commercial quantities into or from
any Philippine port or place, and any vessel which, being
of less than thirty tons capacity shall be used in the
importation of articles into any Philippine Port or place.
The mere carrying or holding on board of contraband or
smuggled articles in commercial quantities shall subject
such vessel vehicle, aircraft or any other craft to
forfeiture: Provided, That the vessel, vehicle, aircraft or
any other craft is not used as a duly authorized common
carrier and as such a carrier it is not chartered or leased;
b. Any vessel engaging in the coastwise trade which shall
have on board any article of foreign growth, produce, or
manufacture in excess of the amount necessary for sea
stores, without such article having been properly entered
or legally imported.
Pursuant to the aforesaid provision, the vessel is clearly subject to forfeiture in favor
of the Government. Forfeiture proceedings are in the nature of proceedings in rem
(Vierneza vs. Commissioner of Customs, 24 SCRA 394) and are directed against
the res. The fact that private respondent has allegedly no actual knowledge that
M/B "Maria Victoria-P" was used illegally does not render the vessel immune from
forfeiture. This is so because the forfeiture proceedings in this case was instituted
against the vessel itself. Private respondent's defense that he has no actual

knowledge that the vessel was used illegally is personal to him but cannot absolve
the vessel from liability of forfeiture.
Moreover, the aforequoted provision prescribes in an unequivocal term the
imposition of the penalty of forfeiture in cases of unlawful importation of
foreign articles regardless of whether such importation occurred with or
without the knowledge of the owner of the vessel. (Commissioner of
Customs vs. CTA and Pascual)